Growing India-Gulf ties

Context: Over the last ten years, Delhi’s relationship with the Gulf has
undergone a significant transformation, marking a diplomatic success for India.
This region holds economic and strategic importance for India, and any strain
in relations would have adverse ramifications. India has maintained
socio-economic and cultural ties with the Arab world since time immemorial. India
has always shared an excellent relationship with Gulf countries, particularly
with the Gulf Cooperation Council (GCC). The primary driver of this
relationship is the robust trade activity between India and the GCC, along with
gains from personal remittances. Prime Minister Narendra Modi’s recent visit to
Kuwait marks his role in strengthening relations between the two countries.

India’s Relations with the GCC

·       Gulf
Cooperation Council: GCC was established by an agreement concluded in
1981 among Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE in view of their
special relations, geographic proximity, similar political systems based on
Islamic beliefs, joint destiny and common objectives. The structure of the GCC
consists of the Supreme Council (the highest authority), the Ministerial
Council and the Secretariat General. The Secretariat is in Riyadh, Saudi
Arabia.

·       Political: The governments
of the GCC members are India-friendly and Indian-friendly. In the recent past,
Saudi Arabia and the UAE have not adopted hostile posture to India’s domestic
developments such as removing the special status for Jammu & Kashmir under
Article 370.

·       Economic: The GCC states
are among India’s key suppliers of energy, and annual remittances from Indians
in these countries are worth an estimated USD 4.8 billion. The United Arab
Emirates (UAE) and Saudi Arabia are India’s third and fourth-largest trading
partners respectively and the total bilateral trade of the GCC countries with
India for the year 2018-19 stood at USD 121.34 billion.

·       Security: Both India and
the GCC are members of the Financial Action Task Force (FATF). Apart from the
participation of Saudi Arabia, Oman, Kuwait, and others in India’s mega
multilateral Milan Exercise, India also has bilateral exercises with most of
them.

Key points

·       Indian
Workers Want to Return to Arab Countries: India has asked the members
of the GCC to facilitate the return of Indians who want to resume work with the
relaxing of Covid-19-related restrictions. This can happen through sustainable
travel bubble arrangements.

Ø  ‘Transport
Bubbles’ or ‘Air Travel Arrangements’ are temporary arrangements
between two countries aimed at restarting commercial passenger services when
regular international flights are suspended because of the Covid-19 pandemic.
They are reciprocal in nature, meaning airlines from both countries enjoy
similar benefits.

·       Cooperation:
Both
sides affirmed their commitment to reform multilateral institutions to reflect
the realities of the 21st century and work together to address contemporary
challenges such as the Covid-19 pandemic, climate change, sustainable
development and terrorism.

·       Importance
of Gulf Region for India: India’s priorities include attracting investments
to increase economic growth, addressing regional security concerns (including
in the Arabian Sea and the Gulf), and enhancing its regional presence and
influence.

Ø  Energy Security
-
The Gulf countries are major suppliers of crude oil and natural gas to India. India
is highly dependent on Gulf oil for its energy needs, making the region crucial
for India’s energy security.

Ø  Remittance - Remittances
from Indian expatriates working in the Gulf contribute significantly to India’s
economy. Remittance is the non-commercial transfer of money by an individual to
his/her home country or family.

·       Challenges
Ahead: The outbreak of the Hamas–Israel war and shipping attacks in the Red Sea
directly impact India’s energy security and economic growth. The war has also
impacted the I2U2 minilateral group, through the continued postponement of a
senior-officials meeting since 2023.

·       Way
Forward: Growing security challenges are sharpening the need for India to become
a key ‘strategic partner’ of the Gulf states and to enlarge its regional
presence and influence. Increased strategic convergence spanning political,
economic and security interests has resulted in a new framework for India–Gulf
relations, which, if successfully maintained, will enhance trust levels and
enable cooperation to become more ambitious in scope.